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EMIR Clearing obligation cleared for take-off

NASDAQ OMX today became the first clearing house approved as a QCCP under EMIR. The decision by the Swedish FSA followed an opinion on March 12th by a college of regulators and central banks from Denmark, Finland, Norway, Sweden, and the UK, as well as the ECB and ESMA. Nasdaq OMX, the fourth largest derivatives clearing house in Europe, largely offers clearing on derivatives in the Nordic and Baltic markets, though it also has a sizeable presence in the German, Dutch and British power markets. The larger significance of the announcement is that the initial authorisation of an EMIR-compliant CCP effectively kickstarts the mandatory clearing process:

1)       ESMA will now consult on whether to impose mandatory clearing for the relevant asset classes. If positive, ESMA drafts the RTS for the Commission’s endorsement.

2)      The Commission has three months to endorse the RTS.

3)      Post-endorsement, the Council and/or the Parliament can object within 1 month, sending the matter back to the Commission for amendment.

4)      Having cleared the hurdles above, the RTS must be published in the Official Journal, specifying the start date of the clearing obligation and the terms of any phase-in.

 The above schedule is variable, but is expected to conclude 9 to 15 months from today- the clock has begun to tick inexorably downwards to the next phase of obligations under EMIR,

 “This is now the kick-off for the central clearing obligation. Probably the earliest possible date for mandatory clearing to start is by the end of this year,” said Reemt Seibel, an ESMA spokesman.

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